Facebook vs.

Non-Facebook Social Network Ecosystem and Market Analysis 2013 2018

http://mindcommerce.com/Publications/FBvsNonFB_SocialGaming_2013-2018.php Published: Oct 2013
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Social network-based gaming has exploded within the last few years, led by the dramatic rise of Facebook with hundreds of millions of users. Social gaming is increasingly becoming a key focal point within the gaming community due in large part to the higher average revenue per unit through monetization of global social networks, local social networks, mobile social networks, and second screen social gaming. At present, the fragmented nature of the industry is due largely to a lack of industry recognition that the biggest change driver is user consumption preferences rather than the specific games or platforms. We anticipate that the current trend of bite-size gameplay will transform to an ecosystem of hard-core social gamers consisting of free-toplay, freemium, and pure-paid models. Similarly local contents along with niche market approach will be the key monetization and growth factors. This research evaluates industry developments in social gaming, company and solution analysis for major players, ecosystem assessment, global vs. regional market strategy evaluation, and market projections. The report provides a comparative analysis between Facebook vs. Non-Facebook social gaming as well as a breakdown of subcategories including local social networks and mobile social network gaming. Target Audience: Social network companies Mobile application developers Wireless infrastructure suppliers OTT application and service providers Social entertainment application developers Wireless carriers and other service providers Online, mobile, casual, and console game companies Companies in Report: 51.com 91 Wireless

Amazon Ameba Pig AppChina Apple Badoo Baidu Bebo BlackPlanet BlueBat Games Chillingo Come2Play Crowdstar Cuteacute D.Cn Games DeNA Mobage Digital Chocolate Disney EA Facebook Fold.it Friendster Gaia Online Gfan Glu Google GoPlay GREE Habbo Half the Sky Movement HeyZap Hi5 Hyves Kaixin KakaoTalk Kik Messenger Line MeetMe Microsoft Millat Millee Literacy Game Mixi

MySpace Nasza-Klasa Netlog Orkut Perfspot Playdom PopCap Games Qihoo 360 QQ Mobile Raise the Village RecycleBank Renren SinaWeibo Sojo Studios Sonico SPENT Tagged Tango Tencent Tiltfactor Lab Tuenti Twitter Ubisoft Viximo Vkontakte VZ.Net Wandoujia WeChat WhatsApp Yahoo-Mobage Yonja Zalo Zorpia Zynga Key Findings: By 2018, the Facebook gaming market is expected to reach $ 5.6 B USD globally on a 554 M gaming customer base whereas Non-Facebook social networking gaming market is anticipated to represent a global $ 9.6 B USD market based on 692 M gamers The Social casino genre and second-screen gaming on mobile social networks will be key growth driver of the industry

APAC will remain the market leader during the period followed by Latin America & Europe Report Benefits: Identify which social gaming genres will be most successful at going mainstream Learn why local social networks including mobile platform will be key growth drivers Market sizing for Facebook vs. Non-Facebook over key regions during the period 2013 2018 Learn about the market for social network gaming across the regions driven by gamer preferences over genres Learn how traditional video games are going to merge with socially playable features and create market disruption Identify trends in emerging business models in social network gaming and the impacts on mobile gaming development In-depth analysis of Facebook ecosystem, genres, business models, LTV generation, and initiatives for second screen space Table of Contents: 1.0 EXECUTIVE SUMMARY 8 2.0 SOCIAL NETWORK GAMING OVERVIEW & TREND ANALYSIS 10 2.1 SOCIAL NETWOK GAMING LANDSCAPE REVIEW 2013 AND BEYOND 10 2.1.1 FACEBOOK SOCIAL NETWORKING PLATFORM 10 2.1.2 NON-FACEBOOK SOCIAL NETWORKS 10 2.1.3 MOBILE SOCIAL NETWORK GAMES 11 2.2 SOCIAL NETWORK GAMING AND BUILDING BLOCKS OF SUCCESSFUL SOCIAL NETWORK GAME 11 2.3 IMPORTANCE OF MEANINGFUL GAMES IN SOCIAL NETWORK GAMING 14 2.3.1 BEJEWELED VS. LAYOFF GAME CASE: FUN VS. MEANING 14 2.3.2 KABUL KABOOM GAME CASE: LEARNING VS. INSPIRATIONAL VALUE 16 2.4 MARKET TREND ANALYSIS 16 2.4.1 MALE DOMINANCE AS HARDCORE SOCIAL GAMERS 17 2.4.2 GAME-PLAY SHIFTING TO MOBILE SPACE 17 2.4.3 GROWING DEMAND OF LOCAL CONTENT 18 2.4.4 SOCIAL NETWORK BATTLE AND EMERGING CROSS-PLATFORM GAMING 19 2.4.5 CHANGING MONETIZATION METHODS 20 2.4.6 SUCCESS OF FRANCHISING BUSINESS MODEL 21 2.4.7 MERGER & ACQUISITION FOSTERING GROWTH IN EMERGING MARKET 22 3.0 SOCIAL NETWORK GAMING BUSINESS MODEL ANALYSIS 23 3.1 VIRTUAL ITEMS AND MICRO TRANSACTIONS 23 3.2 IN-GAME AD / BRANDED GAMES 23 3.3 SUBSCRIPTION/BUNDLE PACK WITH VIRTUAL ITEMS TRADING 24

3.4 IN-GAME AD / BRANDED GAME WITH IN-STORE BENEFITS 24 3.5 PREMIUM GAME WITH IN-STORE BENEFITS 24 3.6 3.7 3.8 4.0 CASINO / CLUB GAMBLING MODEL 25 USER GENERATED MODEL 25 RESEARCH & GAMIFICATION CENTRIC MODEL 26 SOCIAL NETWORK GAMING MARKET VS. OPPORTUNISTIC APPROACH ANALYSIS 27

4.1 GAMING INDUSTRY PEAK VS. NON-PEAK: A COMPARATIVE ANALYSIS 27 4.2 USER ACQUISITION APPROACH: WESTERN VS. JAPANESE & ASIAN APPROACH 28 4.3 REVENUE BATTLE BETWEEN DEVELOPERS VS. PUBLISHERS AND IMPACT ON SOCIAL GAMER 29 4.4 4.5 4.6 4.7 IMPORTANCE OF APPLE AS CHANNEL PARTNER 30 GOOGLE & APPLE NAILS OVER CONNECTED CONSOLE AND WEARABLE DEVICES 31 INTEGRATED GOOGLE PLAY GAME SERVICE 31 MICROSOFT FOR INDIE SELF-PUBLISHER 32

4.8 DISNEY WITH VIDEO GAMING PLATFORM INFINITY 33 4.9 ZYNGA PLATFORM (ZYNGA.COM) 33 4.10 FACEBOOK MOBILE GAME PUBLISHING APPROACH 35 4.11 SOCIAL GAMIFICATION TREND AND BLUEBOX VS. GOPLAY CASE 35 4.12 CIVIC LEARNING: SATIRICAL PRISM GAME DATA DEALER CASE BY CUTEACUTE 37 4.13 MOBILE STRATEGY BLENDED WITH MOBILE SOCIAL GAME, SMS, & QR CODE: RED BULL CASE 37 4.14 MICROSOFT BUZZ WITH AR GAMING GLASSES 38 5.0 NEXT GEN SOCIAL NETWORK GAME: BLENDING WITH REAL-WORLD GOOD DEED 40 5.1 VIRTUAL TO REAL-WORLD DONATION & SOCIAL ACTION: HALF THE SKY MOVEMENT 40 5.2 RESEARCH FOR MANKIND & COMMUNITY PATENT: FOLDIT CASE 41 5.3 COMMUNITY AWARENESS: RECYCLEBANK CASE 42 5.4 EDUCATION & LITERACY: MILLEE LITERACY GAME CASE 43 5.5 POVERTY ALLEVIATION: SPENT CASE 44 5.6 CONSTRUCTING VILLAGE: RAISE THE VILLAGE CASE 44 5.7 CHARITIES FOR CHILDREN: WETOPIA CASE 45 5.8 CHARITIES FOR ANIMAL: JOY KINGDOM CASE 46 5.9 SOCIAL-GOODS FOCUSED GAMING: ZYNGA, SOJO STUDIOS, GRAMBLE, ONEHAZE, & BUDGE 47 6.0 FACEBOOK VS. NON-FACEBOOK MARKET PROJECTIONS 2013 - 2018 49 6.1 FACEBOOK VS. NON-FACEBOOK SOCIAL NETWORK GAMING GLOBAL MARKET VALUE 49 6.2 FACEBOOK VS. NON-FACEBOOK SOCIAL NETWORK GAMING MARKET SHARE 50 6.3 SOCIAL NETWORK GAMING MARKET VALUE IN REGIONS 50 6.4 SOCIAL NETWORK GAMING MARKET VALUE OF TOP 15 COUNTRIES VS. REST OF

THE WORLD 51 6.5 FACEBOOK VS. NON-FACEBOOK SOCIAL NETWORK GAMER GLOBAL PROJECTIONS 51 6.6 FACEBOOK VS. NON-FACEBOOK SOCIAL NETWORK GAMER MARKET SHARE 52 6.7 SOCIAL NETWORK GAMER PROJECTION IN REGIONS 53 6.8 SOCIAL NETWORK GAMER OF TOP 15 COUNTRIES VS. REST OF THE WORLD 54 6.9 7.0 7.1 7.2 7.3 7.4 7.5 7.6 SOCIAL NETWORK GAMING REAL ARPU 54 FACEBOOK SOCIAL GAMING ECOSYSTEM ANALYSIS 56 FACEBOOK MAU SPLIT OVER TOP 15 CONTRIES 56 FACEBOOK USER SHARE IN SEVEN CONTINETS 56 FACEBOOK USER NUMBER IN SEVEN CONTINENTS 57 FACEBOOK PENETRATION RATE BY CONTINENTS 57 HOW USERS INSTALL APPS FROM FACEBOOK PLATFORM? 58 GROWTH TREND OF FACEBOOK GAME GENRE 58

7.7 APP CENTER ANALYSIS FOR TOP-RATED SOCIAL GAME 59 7.7.1 GENRES VS. LEADING COMPANY VS. MAU AND COMPETITION ANALYSIS 59 7.7.2 GENRE VS. PER DAY ARPPU FROM FACEBOOK APP CENTRE 60 7.7.3 REGIONAL DISTRIBUTION OF TOP-RATED GAMES 61 7.7.4 7.7.5 7.7.6 7.7.7 REGIONAL DISTRIBUTION OF TOP-RATED GAMES 61 TRIVIA & WORLD GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 62 SPORTS GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 65 SIMULATION GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 68

7.7.8 STRATEGY GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 71 7.7.9 PUZZLE GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 74 7.7.10 HIDDEN OBJECT GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 76 7.7.11 FAMILY APPS GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 77 7.7.12 CARD GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 80 7.7.13 CASINO GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 81 7.7.14 ACTION GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 84 7.7.15 ADVENTURE AND RPG GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 85 7.7.16 ARCADE GENRE GAMES BY REGION VS. COUNTRY VS. DEVELOPER 87 7.8 ZYNGA AND FACEBOOK INTERDEPENDENCY: A CRITICAL ANALYSIS 90 7.9 BUSINESS MODEL AND MARKET STRATEGY ANALYSIS 92 7.10 WHALES IN FACEBOOK GAME 93 7.11 LOCAL CURRENCY PAYMENTS API 94 7.12 ECOSYSTEM STATISTICS 95 7.13 GAMIFICATION TRAJECTORY 95 7.14 FACEBOOK IN MOBILE AND SOCIAL GAMING ERA 97 7.15 NEW MOBILE GAMING ADS IN FACEBOOK NOTIFICATION 99 7.16 FACEBOOK MOBILE PAYMENT SYSTEM FACEBOOK BUY NOW 100

8.0 NON-FACEBOOK SOCIAL NETWORK GAMING ECOSYSTEM ANALYSIS 101 8.1 WHAT IS BEYOND FACEBOOK SOCIAL GAMING? 101 8.2 LOCAL SOCIAL NETWORK IN EMEA 101 8.2.1 HYVES IN NETHERLAND 102 8.2.2 TUENTI IN SPAIN 103 8.2.3 VKONTAKTE IN RUSSIA 104 8.2.4 VZ.NET IN GERMANY AND EXPANSION NETWORK IN FRANCE, ITALY, SPAIN AND POLAND 105 8.2.5 YONJA IN TURKEY 106 8.2.6 NETLOG 106 8.2.7 NASZA-KLASA IN POLAND 107 8.3 LOCAL SOCIAL NETWORK IN AMERICAS 107 8.3.1 MEETME 107 8.3.2 ORKUT IN BRAZIL 108 8.3.3 SONICO 109 8.3.4 BLACKPLANET IN US 109 8.4 LOCAL SOCIAL NETWORK IN APAC 110 8.4.1 SINA WEIBO IN CHINA 110 8.4.2 8.4.3 8.4.4 8.4.5 8.4.6 8.4.7 8.4.8 8.4.9 TENCENT NETWORK IN CHINA: WEIBO, QZONE AND PENGYOU 111 RENREN IN CHINA 111 KAIXIN001 IN CHINA 112 51.COM IN CHINA 112 MIXI IN JAPAN 113 CYWORLD IN KOREA 114 IBIBO GAMES IN INDIA 115 MILLAT FACEBOOK IN PAKISTAN 115

8.4.10 YAHOO-MOBAGE IN JAPAN 116 8.4.11 AMEBA PIG IN JAPAN 116 8.5 SOCIAL NETWORK: GLOBAL IN NATURE 117 8.5.1 BEBO 117 8.5.2 TWITTER 117 8.5.3 AMAZON 118 8.5.4 ZORPIA 119 8.5.5 PERFSPOT 120 8.5.6 FRIENDSTER 120 8.5.7 GAIA ONLINE 121 8.5.8 BADOO 122 8.5.9 TAGGED 123 8.5.10 HI5 123 8.5.11 HABBO 123 8.5.12 COME2PLAY 124

8.5.13 VIXIMO GAME NETWORK 124 8.6 EMERGING MOBILE SOCIAL GAMING NETWORK ANALYSIS 125 8.6.1 8.6.2 8.6.3 8.6.4 8.6.5 8.6.6 8.6.7 8.6.8 CHILLINGO 125 WECHAT & QQ MOBILE: INTEGRATED MOBILE GAMING PLATFORM 126 KAKAOTALK 127 LINE 128 91 WIRELESS 129 WHATSAPP 129 TANGO 130 KIK MESSENGER 130

8.6.9 ZALO 131 8.6.10 QIHOO 360 PLATFORM 131 8.6.11 WANDOUJIA 131 8.6.12 BAIDU APP STORE 132 8.6.13 8.6.14 8.6.15 8.6.16 APPCHINA 132 D.CN GAMES CENTER 133 GFAN 133 MOBAGE IN JAPAN 133

8.6.17 HEYZAP 134 9.0 CONCLUSIONS AND RECOMMENDATIONS 135 9.1 RECOMMENDATIONS FOR FACEBOOK AND NON-FACEBOOK SOCIAL NETWORKS 135 9.2 RECOMMENDATIONS FOR GAME DEVELOPERS AND/OR PUBLISHERS 136 9.3 RECOMMENDATIONS FOR BRANDS 137 List of Graphs Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 1: GUI of Bejeweled 15 2: GUI of Layoff 15 3: GUI of Kabul Kaboom 16 4: Facebook MAU by top 14 Languages 19 5: McDonald Features Special events on Firmville 21 6: CSI Franchise Adaptation on Facebook 22 7: User Interface of Data Dealer Game 37 8: Leaked Image of AR Gaming Glasses 39 9: In-game Donation Opportunity for Brands and Gamers 41 10: Protein Puzzle and Social Ranking 42 11: Recycle Redeem Reward Quest 43 12: Literacy Game vs. Community Engagement 43 13: Money Flow in the Game 44 14: African Village Quest in the Game 45

Figure 15: Contribution for Children Education in WeTopia 46 Figure 16: Contribution for Animals in Joy Kingdom 47 Figure 17: Facebook vs. Non-Facebook Social Network Gaming Global Market Value 2013 - 2018 49 Figure 18: Facebook vs. Non-Facebook Social Network Gaming Market Share among Total Social Gaming Market Value 50 Figure 19: Social Network Gaming Market value in Regions: APAC vs. North America vs. Europe vs. South America vs. Africa 2013 2018 50 Figure 20: Facebook vs. Non-Facebook Social Network Gamer Global Projections 2013 2018 52 Figure 21: Facebook vs. Non-Facebook Social Network Gamer Market Share among Global Social Network Gamers 53 Figure 22: Social Network Gamer Projection in Regions: APAC vs. North America vs. Europe vs. Latin America vs. Africa 2013 2018 53 Figure Figure Figure Figure Figure Figure Figure Figure 23: 24: 25: 26: 27: 28: 29: 30: Social Network Gaming Real ARPU 2013 2018 55 Facebook MAU by Top 15 Countries vs. % of Total MAU 2013 56 Facebook User Share by Seven Continents 2013 57 Facebook User Number in Seven Continents 2013 57 Facebook Penetration Rate by Seven Continents 2013 58 App Install Percent by Viral vs. Cross Promo vs. Paid 2013 58 Growth Trend of Facebook Game Genre 2011 2013 59 Ranking of Leading Social Gaming Company and their MAU against 12 Genre

Categories on Facebook as of March 2013 59 Figure 31: Top-rated games by studios in regions as on March 2013: NA vs. Europe vs. Asia vs. ME vs. SA vs. Australia 61 Figure 32: Payments and other Revenue for Facebook Q3 2010 Q3 2012 91 Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 33: 34: 35: 36: 37: 38: 39: 40: 41: 42: 43: 44: 45: Distribution of Facebooks Payment Revenue in Regions 2011 2013 92 Facebook Gaming ARPU from regions 2011 2013 92 Zynga DAU Trajectory 96 Connected Smartphone Statistics vs. Facebook 97 SongPop Cross-platform Game Display 98 Facebook Notification Ads for Game 99 Hyves Game Portal 103 Mixi Park with 3D Avatar Facility 114 Top 5 Free vs. Paid Downloaded Applications 119 Game on Zorpia group section 120 Games & Reward on Friendster 121 WE-LINK Mobile Social Game on Android 127 Accumulated Kakao Game Subscription 128

List of Tables

Table 1: Social Network Gaming Market Value by Top Countries 2013 2018 51 Table 2: Social Network Gamer Projection of Top 15 countries vs. Rest of the World 2013 - 2018 54 Table 3: Per Day ARPPU by Genre from Facebook App Centre 60 Table 4: Number of Gaming Apps in Facebook by Genres and Distribution in Asia vs. NA vs. Europe vs. Australia vs. ME vs. SA 62 Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table 5: 6: 7: 8: Trivia & World Games by Region, Country and Industry Leader 62 Trivia & World Games by Developer and Country 65 Number of Sports Games by Region, Country and Industry Leader 66 Sports Games by Developer and Country 68

9: Simulation Games by Region, Country and Industry Leader 69 10: Simulation Games by Developer and Country 71 11: Strategy Games by Region, Country and Industry Leader 72 12: Strategy Games by Developer and Country 74 13: 14: 15: 16: 17: 18: 19: 20: 21: 22: 23: 24: 25: 26: 27: 28: Puzzle Games by Region, Country and Industry Leader 75 Puzzle Games by Developer and Country 76 Hidden Object Games by Region, Country and Industry Leader 77 Hidden Object Games by Developer & Country 77 Number of Family Apps Games by Region, Country and Industry Leader 78 Family Apps Games by Developer & Country 80 Card Games by Region, Country and Industry Leader 80 Card Games by Developer and Country 81 Casino Games by Region, Country and Industry Leader 81 Casino Games by Developer and Country 84 Action Games by Region, Country and Industry Leader 84 Action Games by Developer and Country 85 RPG Games by Region, Country and Industry Leader 85 Adventure and RPG Games by Developer and Country 87 Games by Region, Country and Industry Leader 88 Arcade Games by Developer and Country 90

Contact: Kabir Ahmad, Email: kabir@mindcommerce.com